Toy Industry Up 13%. What’s Inflation Got to Do with It?

Based upon our surveys and my conversations with numerous toy industry leaders and factoring out inflation, I would estimate the toy industry as being up low single digits for 2021.

NPD reports the toy industry as being up 13% in 2021. It’s the toy industry’s second double-digit increase in a row. The industry has not seen this kind of growth since the 80s.

But I have to ask this question, badly paraphrasing Tina Turner, “What’s inflation got to do with it?” I think a lot.

The Consumer Price Index for the United States was up 7% in 2021. (It was up 1.4% in 2020 and and 2.3% in 2019.) Here is how Bloomberg News reported the 2021 increase in a January 12, 2022 article, “U.S. Inflation Shows More Staying Power After Hitting 7% in 2021.”

The consumer price index climbed 7% in 2021, the largest 12-month gain since June 1982, according to Labor Department data released Wednesday.

The Consumer Price Index covers a broad spectrum of product, service and material categories: “Food and beverages, housing, apparel, transportation, medical care, recreation, education and communications, and other goods and services.” Toys are just one, very small input.

Which raises the question, what was the rate of toy inflation in 2021? “The Toy Intelligencer Toy Inflation Index,” which we source and report, conducted three surveys in August, October, and December 2021. The results showed that retail toy prices rose between 10 and 15%.

Based upon our surveys and my conversations with numerous toy industry leaders and factoring out inflation, I would estimate the toy industry as being up low single digits for 2021.

Considering the supply chain train wreck, soaring material and freight costs, and the Omicron edition of Covid, I think low single digits are pretty good.